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Our series of New Year wishes (rather than ‘predictions’) for the procurement, supply and services market for the year ahead (read more about it here) runs from mid-December to early January, then our analyst Bertrand Maltaverne will wrap up with his own take on the key themes that emerge. Wishes are published in no other order than when they are received in our digital postbox.
So continuing this year’s series of wishes from expert tech and service providers, we hear today from Alan Day, Chairman at procurement and supply chain consultancy State of Flux, and one of Spend Matters’ 50ToKnow.
My three wishes 2022:
1. Don’t let good crises go to waste
We know from our latest annual supplier management research that only 12% of organizations are considered leaders in supplier management. So for 2022, I’d like to see chief procurement officers or VP’s of procurement use the supply chain disruptions from the likes of Covid and Suez Canal as the catalyst for their business case for change in the way their organizations’ approach and implement supplier management. They should be looking to make it an organizational change program led by procurement (not just a procurement change program) and introduce globally consistent approaches to supplier management, with it embedded in both procurement AND operational stakeholders’ roles, underpinned with supplier management technology and training. I have an extra wish that goes along with this one, which is the recognition that the audience for supplier management technology is different from procurement technology. The audience for supplier management technology is the operational stakeholder and the supplier (not procurement, we own it, but aren’t the main audience), and that this technology requires alignment within the organization’s stakeholders (Procurement, Operational, Executive and Suppliers) to make it work.
2. Using supply chains for good
As organizations look at value that they get from their suppliers and supply chains, my wish for 2022 is that they are using this to drive social change and sustainability standards down their supply chain. That is, not just looking at the best price from their suppliers for a particular good or service, rather how can they use the money they spend to help local businesses, small or medium-sized enterprises, or diverse and inclusive organizations. This will also require them to re-think their sourcing and supplier management models, improve their processes and retrain their teams to deal with these types of suppliers. Finally, it will be more of a focus on how their organization can be a customer of choice for these suppliers, so for example: what are they offering these suppliers to be attractive for them to work with them, easier on-boarding, better more flexible payment terms, and supplier training to name a few.
3. Supplier Management as a key to revenue generation
Again from this year’s annual supplier management research, we know that if your organization is good at supplier management then you are 5 times more likely to get enhanced speed to market for new products and services, you are 3 times more likely to get innovation from suppliers and twice as likely to get scarce resources and the suppliers ‘A’ team. Not to mention the ability to mitigate supplier continuity risk; more than two-thirds of organizations use the relationship with suppliers as their key risk mitigation strategy. Our wish for 2022 is more procurement organizations understand and build into their operations the effect they have on key products and services, how they influence their organization’s EBITDA and how good supplier management will improve these.
Today we also hear from Dan Broderick, CEO and Co-Founder of AI, automated contract review solution provider BlackBoiler.
My three wishes for 2022:
My wishes are all about freeing procurement professionals from paralyzingly slow contract review processes so they can be more agile in the face of the ongoing upheavals in the global supply chain — and I can buy construction lumber from my home improvement store when I need it.
1. Save time to make time
I want procurement contracts to stop taking three to six months when with AI-enabled automation tools they could be completed in a fraction of the time. This would free up supply chain and procurement professionals to focus on strategic tasks such as customer communication, business planning or issue resolution. This would reduce bottlenecks across every industry from medicine to electronics.
Leave legal out of it
Every contract needs to be run through the legal department. For many standard contracts, the procurement department may not need to seek the review of an attorney if automated software is being used. If a sales contract with a long-term vendor contains clauses that fit within the company’s playbook and the tool already knows to automatically insert that language, the legal department may not need to get involved at all. Implementing automated contract review tools can help organizations determine which potential legal issues should take priority and weed out the contracts that don’t need to be routed to legal.
3. Eliminate Groundhog Day
Procurement teams spend a lot of time reviewing contracts that are broadly similar (or often almost identical) to each other. If automated tools are used instead, teams can import edits from relevant, previously reviewed, contracts. This would also add a useful layer of data analysis, providing insights into the organization’s historical approach to managing risk. And when a procurement team works with a new vendor, it can upload the new contract into the automated system. AI-powered tools will detect similarities and anomalies with elegant simplicity. If this can save somewhere around 70% of the time normally spent on contracts review, why on Earth not?
Thanks to State of Flux and BlackBoiler, and look out for more solution and services provider wishes/predictions over the next few weeks, with an overall take on the series from our analysts at the end. See more vendor predictions and wishes here.
And if you are looking for procurement services providers to help you with your 2022 decisions, look no further than our Procurement Services Market Landscape Directory.
